Midwest firm looking at locals

BKD LLP, a Springfield, Mo.-based accounting firm, is in negotiations with Albuquerque-based Neff + Ricci LLP, one of the state's largest tax and accounting firms.

According to Wayne Brown, managing partner at Neff + Ricci, "We have been approached by various firms in the past and are seriously considering the matter."

BKD is ranked the seventh largest CPA and advisory firm in the United States by Hoovers Online. The accounting firm has made headlines the past few years for aggressively expanding its reach throughout the heartland states. Its most recent acquisition was a tax firm in Kentucky on Oct. 1, 2003.

According to its Web site, BKD reported $215 million in revenue for the last fiscal year ending on May 31, 2003. The firm has 1,500 employees at 27 locations with a client base of 40,000 companies.

Neff + Ricci was ranked number one by number of professionals on the New Mexico Business Weekly list of top accounting firms last year. The company was founded in 1947 and has a staff of 112. The firm specializes in healthcare, construction, financial institutions and colleges and universities. Albuquerque Public Schools, University of New Mexico, New Mexico Institute of Mining and Technology (New Mexico Tech), the city of Albuquerque and the city of Santa Fe are a few of the firm's well-known local clients.

Allan D. Koltin, an analyst and CEO of Chicago-based PDI Global Inc., a national consulting firm that has worked with BKD for the past five years with acquisitions, says it was just a matter of time before BKD moved into the New Mexico market.

"BKD has done a wonderful job not only growing itself organically but also positioning itself in strategic markets where they acquire local firms and begin to dominate that market," says Koltin. "And it shouldn't surprise anyone if you hear in the next few months or in the coming year that BKD acquired another local firm in New Mexico," he says. "It's their strategy to acquire or merge with these small firms and it seems to work very well," he adds.

Although Koltin says New Mexico was a realistic place for this national agency to move in to, he does say one obstacle that BKD might face is the loyalty many companies have to small business in the state.

"Albuquerque has always struck me as being ideal for small firms because I get the sense that people like to do business locally and from what I have observed, BKD may have a hard time breaking through that barrier," says Koltin. "However, BKD has been in this situation before in other markets and through its experience with dealing with this barrier will more than likely be able to pull right through," he adds.

BKD has approached at least one other local accounting firm in the past year.

"It's a great move on BKD's part, and I think it will just make other firms try that much harder to remain competitive," says Ray Roberts, managing partner at Carlsbad-based Accounting & Consulting Group, LLP.

"From a competition standpoint, I think there is always competition, whether its with other local or national firms, but I don't see there being such a huge shake-up that firms lose clients," he says. Accounting & Consulting has about 5,000 clients across the state and operates four locations.

Robert A. Lenberg II, managing partner at Albuquerque-based accounting firm Pulakos & Alongi Ltd., agrees with Roberts and adds that BKD would probably score more of the national clients.

"For the other local firms, I think we're all in a similar realm and aren't really focused as much on the multi-national business," says Lenberg.

"I think its always good for the state to have several healthy firms," he says.